Japan: Eyes on Siberia

Even the most inscrutable Japanese businessman becomes more scrutable when he talks about Siberia, which is 35 times as large as Japan’s home islands and less than 400 miles away. Mainland Siberia is one of the world’s largest reservoirs of undeveloped natural resources (see map), a fact that does not fail to impress the raw material-hungry Japanese. Russia has tried without much success to make Siberia an economically profitable territory. At the same time, Japanese businessmen have had their eyes cocked on Siberia as a place where they might make a lot of money. The Russians, however, have always resolutely tried to shut the Japanese out. That impasse has now come to an end.

Anxious to populate and develop Siberia and determined to fend off Red Chinese incursions, Russia is turning to Japan for capital and technical assistance. Dazzled by all the timber, iron ore, copper, manganese, oil and diamonds so close across the Sea of Japan, the Japanese now refer happily to Siberia as “virgin soil.”

Trickle in a Thaw. The first Russo-Japanese venture in Siberia is already under way. This summer Communists and capitalists after much dickering over terms signed an agreement under which Japanese banks will grant a $133 million, five-year loan at 5.8% to enable the Russians to develop Siberian timber cutting. In addition, a consortium of 13 Japanese companies, including such big trading firms as Mitsui and Mitsubishi, will be allowed to sell $30 million worth of consumer goods to Russian settlers in Siberia. As repayment of the loan and to cover its interest, the Russians over a five-year period will ship 8,020,000 cubic feet of timber to Japan. With housing chronically short in Japan and with U.S. West Coast suppliers restricting sales of logs to the Japanese to protect domestic plywood sources, the Siberian timber agreement is a coup.

The pact, which had been discussed for a decade before the Russians stopped saying nyet, is the first trickle in what the Japanese hope will become a Siberian thaw. Russia is already proposing that Japan might like to lend another $140 million to build a pipeline from Siberia’s Ohka oilfields to the sea and perhaps take part in a $1.2 billion program to develop copper mines near Lake Baikal. Japan, which has few raw materials itself and is forced to import oil from the Middle East and copper from Africa, is understandably interested in these and other ventures.

The Japanese estimate that Siberia contains at least 5 billion tons of iron ore, 20 billion cubic meters of natural gas, limitless hydroelectric power, and eminently marketable amounts of pelts from sable, lynx and big Siberian bears. “We have a destiny in Siberia,” says Yoshinari Kawai, 82, a canny Japanese bulldozer manufacturer who led the timber negotiations and now heads the Japanese consortium. “Happily, that destiny will be equally profitable to us Japanese and the Russian people.”

Trade Without Treaty. Siberian development is only part of the broadening trade between Japanese eager to export consumer goods and know-how and Russians avid for capital and technical advice. Japan’s trade with Russia doubled last year to $610 million and reached $500 million for the first seven months of this year. Not even the fact that the two nations, which dispute ownership of small islands lying between northernmost Japan and the Russian-held Kuriles, have still not signed a World War II peace treaty seems to slow down the economic get-together. One reason for this is the Japanese philosophy of Seikei Bunri. That means roughly that economics and politics are separate and should never interfere with each other.